Thanks to the increased freight rates from Brazil to China, prices of high-grade iron ore from India have increased by almost 20% in last one month. Freight rates from Brazil to China have gone up to $65-71 in August 2007 from $35-40 per tonne in January 2007.
Prices of high-grade iron ore have gone up by almost 60% during the last six months. Iron ore with Fe content 63.5% and plus is currently being sold at about $100 per tonne in China.
The rise in freight rates from Brazil to China has given India an advantage as the freight rate from India to China stands $30 to $ 35 per tonne whereas miners from Brazil have to shell out $65 to $71 as freight per tonne, a JSW official told FE. Buyers from China are increasingly looking at iron ore from India as it has gained a distinct price edge as compared to the raw material available from other nations, official said. President, Federation of Indian Mineral Industries, Rahul Baldota, said that the advantage, which has come to Indian mining industry, is a temporary phenomenon. Iron ore exports from the country should be down by about 15% y-o-y basis.Demand from Chinese steel mills is set to remain strong for some time as the autumn period starting in September is usually a busy time for steel makers, an industry expert said. Losses due to lower sales are likely to be offset in August 2007 due to a jump in international spot iron ore prices for high-grade iron ore to $100 per tonne from $52 per tonne.
Earlier, the iron ore exports from India between April and June 2007 had suffered a decrease of about 9% to 22.03 million tonne as compared to April and June 2006.